Greece bounces back

Author: Max Anderson
Photography: Angelo Cavali/Getty Images

The Greek Prime Minister, Alexis Tsipras, promised a "national rebirth" for his economically crippled nation when he marked the new year. Other observers from abroad were just as upbeat, though for different reasons. "Greece is the word for 2016" reported the Daily Mirror as new-year bookings from the UK to the Hellenic isles ran hot. "The question really is why shouldn't you go?" asked the Flight Centre Travel Group, based in Australia and one of the world's biggest travel agencies, when it predicted this year's hotspots.

Only eight months ago, news headlines were anything but upbeat - "Greece: Can't Pay, Won't Pay"; "Greece Closes Banks as ATMs Run Dry" - as the country endured two elections, a referendum, capital controls and a brush with bankruptcy and eurozone exit.

As four years of Greek economic crisis came to a head, it seemed inevitable that foreign tourists - the mainstay of an industry worth $55.52 billion and nearly 18 per cent of GDP - would cancel or postpone travel.

Sure enough, tourist numbers were soon telling a story. Although not the story most observers expected.

The Greek Tourism Confederation posted a record low of 179,000 visitors arriving in the winter month of February 2014. But in the summer month of July 2015, just after the bank closures, the confederation announced a record high of 3.03 million tourist arrivals.

Even the Alternate Minister for Tourism, Elena Kountoura, seemed surprised when she announced in October there had been a turnaround that "exceeded our initial expectations". "In 2014 we had 22 million tourists and €13.5 billion revenue," she told Greek media. "2015 shows close to 26 million tourists and revenue to exceed €15 billion."

Observers are predicting 2016 will break new records. So what's happened?

"What plays out on the news and what's happening on the ground are two different stories," says Halina Kubica, managing director of the Sydney-based Greece and Mediterranean Travel Centre and a Greek travel specialist for 20 years. "There were a couple of hard years in 2013 to 2014, but after all the drama, people have to holiday somewhere."

Kubica says her agency lost a few last-minute bookings during the capital control crisis but most travellers were undeterred. "The demand became high, almost too high - in fact, in end-June and mid-September we were begging to get rooms on Mykonos and Santorini. There were no rooms. Absolutely nothing."

This apparent paradox can be partly attributed to the Greek travel industry's swift action in 2013-2014. When tourism took a hit, operators offered discounts to Greece's biggest markets in Germany, France and Britain. By mid-2015, just as the headlines were about to turn grim, Greece found itself not with a perfect storm, but a perfect summer; the bookings were in the bag.

When the banks began to limit cash in June, the government quickly reassured travellers there would be no limits on ATM withdrawals made by foreigners.

"[Australian] travellers were definitely not put off Greece despite the negative headlines," says Tom Walley, the head of leisure travel at Flight Centre. Indeed, Flight Centre predicts Greece will be one of 10 hotspots this year and with good reason - bookings in 2015 were up an astonishing 52 per cent on 2014. Walley says cheap international airfares have played a part in this: "We've seen some great airfares to Greece, particularly during early-bird season in September. Athens airfares were coming in as some of the best value, and the city remains a great-value entry point to Europe."

The crisis has also shaken up Greek operators, many of whom have improved service and value for money. "Once you're struggling, every client counts," says Kubica. "Service has improved amazingly. I was there in October and every restaurant was going above and beyond. I went in a party of four to a restaurant serving modern Greek on Santorini and it cost €80 - which is about $125. That's with all wine, beer and food. Where can you do that in Sydney?" 

A recent ranking by online booking agent Trivago seems to bear out the claim that Greek operators have their act together. In its 2015 Mediterranean Island Reputation Ranking, based on 140 million international reviews of hotels, the Cycladic isle of Ios comes out top, with Hydra, Folegandros, Santorini, Mykonos, Naxos and Paros all scoring highly.

Despite the ongoing grim economic conditions, the Greek tourism industry has continued to invest both publicly and privately. Aegean Airlines, which acquired Olympic Air in 2013, is a star performer, with 14 new destinations, four new Airbus A320s and 1.1 million seats being added to its service this year. Several luxury boutique hotels - including AthensWas near the Acropolis, and Sophia Suites in Santorini - have opened recently. Athens' Hellinikon development is still on the drawing board, but if investors realise their €2.1 billion vision, the old airport site will be turned into a marina, a kilometre-long city beach and one of the world's biggest parks.

The expectation of a record 2016 is also being driven by crisis, though beyond Greece's borders. The bombing of a Russian commercial flight leaving Sharm-el-Sheik in October and heightened terrorism fears following the January suicide bombing in Istanbul are likely to see some four million Russian and German tourists rethinking their traditional summer holiday retreats in Turkey and Egypt. Greece is certain to be considered a safer alternative.

Even in times of uncertainty, as Halina Kubica points out, people have to holiday somewhere.

Check out our story on the 10 best Greek islands here.

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